Premier League clubs have decided to vote in favour of bringing in Squad Cost Ratio rules to replace existing Profit and Sustainability (PSR) regulations. The decision comes from Friday’s shareholder meeting, with representatives from all 20 clubs given an opportunity to place their vote on proposed changes.
Three main changes were suggested, which included top-to-bottom anchoring (better known as just anchoring), squad cost rules (SSR), and sustainability and system resilience (SSR). The former of those three was viewed as the most controversial, as it would place a hard cap on spending in the division.
Anchoring takes the figures from the distributed money of the poorest club in the division and allows every club in the Premier League to spend five times as much on player expenditure, including wages and transfer amortisation. The rule effectively puts an upper limit on how much every club can spend, scaled by how much the division makes.
Reports before suggested that Arsenal, Manchester City and Manchester United were against the anchoring proposals, with United’s co-owner, Sir Jim Ratcliffe, vocal on his dislike for the system over the past year.
The introduction of SCR rules, meanwhile, will bring the Premier League in line with UEFA, which already limits clubs to a 70 percent spend of revenue on football costs such as wages and transfer fees.
“At a Premier League Shareholders’ meeting today, clubs voted to introduce a new set of financial rules which will come into effect from the start of the 2026/27 season,” a statement read.
“Following extensive consultation, clubs agreed to bring in Squad Cost Ratio (SCR) and Sustainability and Systematic Resilience (SSR) proposals. There was insufficient support for a proposal on Top to Bottom Anchoring.
“SCR will regulate clubs’ on-pitch spending to 85 per cent of their football revenue and net profit/loss on player sales. Clubs will have a multi-year allowance of 30% that they can use to spend in excess of the 85 per cent. Utilising this allowance will incur a levy and once the allowance is exhausted, they will need to comply with 85% or face a sporting sanction.
“The new SCR rules are intended to promote opportunity for all clubs to aspire to greater success and brings the League’s financial system close to UEFA’s existing SCR rules which operate at a threshold of 70 per cent. The other key features of the League’s new system include transparent in-season monitoring and sanctions, protection against sporting underperformance, an ability to spend ahead of revenues, strengthened ability to invest off the pitch, and a reduction in complexity by focusing on football costs.
“The Sustainability and Systemic Resilience rules assess a club’s short, medium and long-term financial health through three tests – Working Capital Test, Liquidity Test and Positive Equity Test.
“Since 2023, the Premier League and our clubs have worked collaboratively to develop the financial controls with the objective of maintaining the League’s value, protecting competitive balance and ensuring clubs operate in a financially sustainable way.
“The process has included extensive consultation at Shareholder level at clubs, as well as senior finance and legal executives, and club working groups. In addition, independent economic and legal analysis was sought.
“As part of the development of the proposed rules, clubs agreed at the Premier League Annual General Meeting in June 2024 to trial SCR and TBA on a non-binding basis. The shadow monitoring of SCR and TBA rules has also continued this season.
“This enabled the League and clubs to fully evaluate the system, including the operation of UEFA’s equivalent SCR regulations, and to complete the consultation with all relevant stakeholders including the PFA and football agents.”
“The existing Profitability and Sustainability Rules will remain in place for the remainder of 2025/26.”
In all, it means further changes to the football landscape in the Premier League, with clubs having to abide by the new squad cost rules. It is back to the drawing board for the chiefs in the division when it comes to the suggestion of a spending cap, however, with clubs clearly not convinced when it comes to the proposed measures.